A college education has always been presented as a stepping stone to a better life. While the latter might be attainable, data has shown that in recent years’ students have been paying more to attend college than what they make once they graduate. A situation that has had many questions —is a college education a worthy investment?
According to data from the National Center for Education Costs in 2019, an average college student paid $24,623 in college costs (including tuition and fees, room and board, and allowances for books and supplies, transportation, and other personal expenses) Statistics.
College costs have seen an increase of 59 percent since 2000, where the college inflation-adjusted fees were $15,485. Compared to 1990, the average tuition and fee rates have seen a rise of 130 percent, adjusted to inflation. Between 1980 to 2019, college costs have increased by 169 percent over the past four decades, according to Georgetown researchers’ analysis of data from the National Center for Education Statistics data.
Currently, for public in-state university students, college costs range from $27,330 and $55,800 for private nonprofit college students. If scholarships and grants are factored in, average net costs for tuition and fees in these universities range from $2 640 and $14,990, respectively.
But as statistics point out, there is some disparity between college costs and income earned afterward. While the price of a degree has doubled, wages haven’t increased much since the 80’s—compared to wages, college costs have risen nearly eight times faster.
The impact of which has seen more millennials and Gen Zs take out student loans to finance their education. According to Investopedia, nearly one-third of all American students have to use student loans to pay for their college education—resulting in an average student loan debt of $38,792 in 2020 per student.
The reality, however, is that many of them cannot service these loans on what they make after they finish college. Collectively, student loans in the US are currently at $1.73 trillion in quarter two of 2021—a 3 percent increase compared to quarter two in 2020.
Noticeably, student debt has grown to unprecedented levels this past decade, with the debt standing t $905 billion in 2011—an increase of 91 percent this past decade. Could it be because of the college cost v. income dynamic?
“Postsecondary education policy has failed to keep higher education affordable even as formal education beyond high school has become more essential,” read in part a Georgetown University report assessing wage and college growth disparity.
Despite that, the report points out that education is still a worthy investment, with median earnings for young adults with a college degree are at least $45,000, while those without a college degree average at $30,000.
But who is to blame for the growing gap between wages and college costs? Could it be that the economy has been reeling from the effects of the Great Recession? Has Covid-19 made it worse? The economy likely has very little to do with the gap; perhaps the government has made little effort to match the two. Government grants aren’t even coming close to making a college education affordable.
“The evidence of our failure to help all youth make long journey from early childhood to adult economic independence is plain. In the trajectory from kindergarten to a good job, the most talented disadvantaged youth do not fare nearly as well as the least talented advantage youth,” read the Georgetown report.
With student debt in America growing, and more than 5 percent of all these loans in default, the government will need to reevaluate whether student loans are tenable or intervene when it comes to college costs.